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+++ Increasing pressure to get AUTONOMOUS VEHICLES ready for the road has created an open invitation for innovative startups to show what they can do. 2 of the companies that made some noise at the Frankfurt auto show this month were China’s Horizon Robotics and OSR Enterprises of Switzerland. Both startups are working with global premium brands. OSR last week announced a collaboration with Jaguar Land Rover that includes advanced driver assistance systems (ADAS) and automated driving. Horizon Robotics, meanwhile, has deals with Audi, which it has helped secure open-road AV testing licenses in Beijing and Wuxi, Faurecia and Robert Bosch. One thing both startups have in common is they offer open solutions. “By offering customers this flexibility they can develop their own software and put it on our processor”, Horizon Robotics senior business development manager Jerry Zhang told. At Horizon Robotics it comes via the Journey 2 processor that was specifically developed for artificial intelligence (AI) computing. OSR says its Evolver solution is a “hardware- and software-centralized supercomputer” that can help give a car AI capabilities. “Automakers get all the computing power they need to develop their own algorithms on this open platform”, said Sam Hazak, who is an AI engineer at OSR. Founder and CEO Orit Shifman added: “The Evolver acts as a brain by bringing all of the data from the car’s ECUs together”. Like Nvidia proved years ago with its multi-talented graphics processor units, which continue to play a key role in the progression toward fully autonomous driving, companies with game-changing products will continue to earn a place at the table with the world’s most powerful automakers. +++

+++ BMW ’s finance chief Nicolas Peter wants to cut between 5,000 and 6,000 jobs by 2022, mostly at the carmaker’s Munich headquarters. BMW has also been undergoing a shakeup of top managers. Ilka Horstmeier is a favorite to head human resources, while Milan Nedeljkovic will take over as head of production. In August, Oliver Zipse succeeded Harald Krüger to became chief executive officer, leaving vacant the production role he had overseen. BMW announced that Milagros Caiña Carreiro-Andree, the board member in charge of human resources, would not seek a new term, citing personal reasons. +++

+++ A group of 23 states sued to undo the Trump administration’s determination that federal law bars CALIFORNIA from setting stiff tailpipe emission standards and zero emission vehicle mandates. The states, led by California and joined by the District of Columbia, Los Angeles and New York City, are seeking a court order blocking a determination unveiled by the U.S. Transportation Department and its agency the National Highway Traffic Safety Administration. “Mr. President, we’ll see you in court”, California Attorney General Xavier Becerra said in a statement. The states suing include New York, Michigan, Colorado, Illinois, New Jersey, New York and Massachusetts. The U.S. Transportation Department did not immediately comment on the suit. It said that federal law preempts state and local regulation of vehicle fuel economy, including California’s greenhouse gas vehicle emissions rules that are followed by about a dozen other states. The legal challenge does not address a parallel decision by the U.S. Environmental Protection Agency to revoke a 2013 waiver California received under the Clean Air Act to set emissions standards. That does not take effect until late November. The lawsuit marks the latest salvo in a high-stakes battle between the Trump administration and state officials over the future of U.S. vehicles. Becerra said the Transportation Department’s determination was unlawful, and that the administration misread federal law and ignored the intent of Congress. “The administration insists on attacking the authority of California and other states to tackle air pollution and protect public health”, Becerra said. +++

+++ An Tiecheng, chairman of DONGFENG PEUGEOT CITROEN Automobile, has left amid slumping sales at the joint venture between Dongfeng Motor Group and PSA Group. An, 56, joined China Automotive Technology and Research as chairman and president, the state-owned automotive technology research institute said. PSA and Dongfeng plan to restructure their joint venture operations. They aim to to reduce the breakeven point to below 180,000 vehicles this year and to below 150,000 vehicles between 2020 and 2021. Dongfeng Peugeot Citroen, headquartered in the central China city of Wuhan, can produce up to 840,000 vehicles annually for the Peugeot and Citroen brands at full capacity. After hitting a high of 700,000 in 2015, the partnership’s annual deliveries have dropped sharply. In 2018, sales slipped 33 % to around 253,000 vehicles. Dongfeng Peugeot Citroen’s sales slump has accelerated this year, with volume plunging 57 % to 81,045 in the first 8 months, according to Dongfeng. Dongfeng Peugeot Citroen has not named An’s successor. An started his automotive career at China FAW Group in 1984. From 2004 to 2013, he was president of FAW-Volkswagen Automotive, FAW’s joint venture with VW Group. Over the next 4 years, he was head of FAW’s car unit. In 2017, he was hired by Dongfeng as vice president in charge of its joint venture with PSA. +++

+++ The EUROPEAN UNION ’s trade chief reiterated a pledge to impose retaliatory tariffs against the U.S. should President Donald Trump follow through on a threat to hit the bloc’s automotive goods with duties. European Trade Commissioner Cecilia Malmstrom criticized Trump’s assertion in May that EU cars and auto parts shipped to the American market pose a security risk to the U.S. The Trump administration faces a self-imposed deadline of mid-November to decide whether to curb such imports. “We firmly reject that we are a security threat”, Malmstrom told a conference in Brussels. “That is absurd. If there will be tariffs there, we would take countermeasures”. Transatlantic trade ties, the world’s biggest economic relationship, are approaching a crucial juncture largely in the shadow of the U.S.-China commercial war: Planned EU-U.S. negotiations to eliminate duties on industrial products remain blocked by American demands to include agriculture in any market-opening deal. Both sides are set for a tit-for-tat tariff fight over aircraft aid deemed illegal by the World Trade Organization. Trump is keeping alive the possibility of automotive import levies. The EU is deeply concerned about a looming deadlock at the WTO’s appellate body, to which the U.S. has refused to consider any appointments on the grounds the forum’s members have strayed from their original mandate. “Relations are tense”, said Malmstrom, a Swede whose 5-year term as EU trade commissioner ends on Oct. 31. She is due to be succeeded by Ireland’s Phil Hogan, who is currently EU agriculture chief and who earlier this month called Trump “reckless”. Last year, Trump infuriated Europe by declaring American imports of steel and aluminum a security threat and imposing levies of 25 % and 10 % respectively, on shipments from around the world including the EU. That prompted the bloc to retaliate with a 25 % tariff on €2.8 billion of American goods such as Harley-Davidson motorcycles, Levi Strauss jeans and bourbon whiskey. A 25 % U.S. levy on foreign cars would add €10,000 to the sticker price of EU vehicles imported into the country, according to the Brussels-based European Commission, the bloc’s executive arm. The value of EU automotive exports to the American market is about 10 times greater than that of the bloc’s steel and aluminum exports combined. As a result, European retaliatory duties would target a bigger amount of U.S. exports to Europe. Caterpillar trucks, Xerox machines and Samsonite luggage are among U.S. goods that would face such EU retaliation, a senior European official said in late February on the condition of anonymity. +++

+++ In FRANCE , Renault and PSA Group face a potential stand-off with French workers worried that an industry drive to meet EU emissions targets will fuel demands for concessions in upcoming labor negotiations. Renault and Peugeot maker PSA are seeking to renew 3-year, nationwide pacts covering wages and other working conditions in the coming months, which in the past have allowed them to trim costs. Informal labor talks between Renault and workers began in early September, unions said, and are set to kick off at PSA next week. While negotiations have been fraught before, and involve balancing demands like pay freezes and pledges to produce or invest in France, unions are already bristling over fears for jobs in motor factories amid a shift toward electric cars. No clear outlines on potential job or wage demands have been put forward yet. PSA’s summons for discussions referred to the “energy transition” as a high priority. Renault said it did not want to comment on discussions that were just starting. PSA said it was hoping for constructive talks that took into account “the stakes for the group”, without giving further details. A majority of French auto unions backed previous accords in 2013 and 2016, in deals that came after the euro zone debt crisis and austerity measures had hit consumer demand. “And now? PSA is making a lot of money, and the new (CO2) regulations are coming in at just the right time so they can tell us that they need to keep improving the group’s performance”, said Franck Don of the PSA faction at the CFTC union. Carbon dioxide emissions must be cut to 95 g/km for 95 % of cars by the end of 2020 under the new EU rules, from the current 120.5 gram average. The green overhaul is raising concerns over profits in a sector already facing faltering sales, with cleaner auto models still far pricier to build than traditional ones and the extent of consumer demand for these vehicles unclear. European car registrations fell 8.6 % in August, data this week showed, although an exceptional surge last year distorted comparisons. At a PSA factory in Metz, northeastern France, employees are concerned plans to produce electrified gearboxes there may not make up for cutbacks to traditional ones. “It’s the tip of the iceberg: the labor map in France is being redrawn”, said Maria Casoli of main PSA union, Force Ouvriere. France’s hard-left CGT union was the only one to veto previous pacts, allowing the carmakers to pursue their planned competitiveness measures. +++

+++ In GERMANY , the government will raise incentives for buying electric cars under its new climate plan, as well as raising road tolls for trucks from 2023 and pumping money into rail operator Deutsche Bahn. All proceeds from a new carbon dioxide (CO2) pricing system will be re-invested in climate protection or given back to citizens in form of financial relief, the document showed. The package sets out plans to raise the price for auctioning CO2 certificates to a range of 35-60 euros per tonne in 2026. The federal government will issue “green/sustainability bonds” under the plan. +++

+++ HONDA will drop gasoline versions of the next Jazz due in Europe in 2020 to concentrate on hybrid sales. The Jazz will use a version of the dual motor i-MMD (Intelligent Multi-Mode Drive) technology available in the new CR-V, but with a 1.5-liter gasoline engine instead of a 2.0-liter unit. The full-hybrid system uses the engine to both charge a 1 kWh lithium/ion battery and power an electric generator, which then spins an electric motor connected to the wheels, giving the feeling of driving an electric vehicle. The Jazz will include design elements from the high-tech E full-electric minicar as the company tries to pitch the car to a younger audience, said Dave Hodgetts, managing director of Honda UK. The E was launched at this month’s Frankfurt auto show. Hodgetts said the design upgrade to the Jazz would help offset the added cost of the hybrid drivetrain. “The car will be more expensive because the powertrain is more expensive, but it’s a much more premium car. It has definitely moved up in terms of value”, Hodgetts said. The next Jazz will will look “very different” from the current car, he said. The hybrid move is the latest push into electrification from brands selling in Europe as they try to bring down fleet CO2 emissions to the required 95 gram per kilometer by 2020-21. Failure to do so will result in fines. Honda predicts the Jazz hybrid will have CO2 emissions close to 99 g/km compared to about 118 gram for a gasoline-only version. European sales of the Jazz fell 20 % to 17,140 in the first half. More than half the sales were in the UK, where the car is popular with retirees. The hybrid Jazz will compete with the Toyota Yaris, which has seen sales grow since a hybrid variant was added in 2012. Nearly half of the 130,967 Yaris models sold in the first half were hybrids. +++

+++ KIA could launch an electric version of the Picanto if the automaker can find ways to reduce costs to make the car affordable. A battery-powered Picanto will be “a big challenge”, said Emilio Herrera, Kia Motor Europe’s chief oprating officer. “But sooner or later, we will have to do it”. Automakers are rethinking small-car strategy in Europe in response to tougher European Union emissions limits that will force them to add costly new technology to cars that already bring in low profits. Ford will stop selling its Ka+ in the region while Opel is dropping its Karl and Adam models. Volkswagen Group is expected to replace its VW Up, Skoda Citigo and Seat Mii internal combustion cars with battery only models. Seat has been tasked developing small EVs for the group that will cost less than €20,000. At the Frankfurt auto show this month, Renault said it is working to launch a €10,000 electric vehicle in Europe within 5 years. Herrera said he is skeptical that Renault will achieve the goal. “I think that is a very bold statement because one of the most challenging things we have is to make all EVs profitable. And the smaller the car, the more complicated it is. So to have a €10,000 EV in that time frame, I see it very challenging and not very realistic”, Herrera told. Despite this, Herrera said Kia is looking into the possibility of an electric Picanto. “There’s nothing confirmed yet, but we are really looking at it”, he said. He gave no time frame for a decision. A Picanto EV would currently cost about €20,000, Herrera said. He said Kia needs to reduce production costs for a Picanto EV to about €16,000 – €17,000. Kia could try to find synergies with sister brand Hyundai if it wanted to produce an electric version of its i10. Herrera said automakers should not count on government incentives that boost EV sales by reducing the price differences between internal-combustion-engine and battery electric vehicles. In 5 years, those incentives may be gone because so many EVs will be on the road that it will be too costly for governments to offer subsidies, he said. Why would Kia take up such a difficult challenge? “Because mini and small cars are so important in Europe. In countries such as Italy they account for 50 % of the market, so I think we will have to have a battery electric minicar”, Herrera said. According to JATO Dynamics data, the mini- and small-car segments together command 26 % of the EU market. Kia’s goal is to have an electric car “in almost every main segment”, Herrera said. Kia currently sells electric versions of the Soul and the Niro in Europe. Kia will sell about 20,000 of the 2 EVs in Europe this year and plans to double that figure in 2020, Herrera said. +++

+++ Daniela Gerd tom Markotten, the head of a joint MOBILITY SERVICES unit of Daimler and BMW, has resigned, BMW said. “We can confirm that she has left the company at her own request”, a BMW spokeswoman said. Gerd tom Markotten deemed the level of investment in the business, whose portfolio includes car sharing platforms and is part of a wider mobility alliance between the carmakers, to be insufficient. No decision has yet been taken on a successor. +++

+++ RENAULT has launched its first China-built electric vehicle, the K-ZE, at an auto show this month in the south China city of Chengdu. The subcompact crossover targets urban commuters and is priced from 61,800 yuan ($8,729) to 71,800 yuan after government subsidies, according to Dongfeng-Renault, Renault’s passenger vehicle joint venture with Dongfeng Motor. The low-cost EV has a range of 271 kilometers and a maximum speed of 105 kph. The K-ZE is the third product Renault has built with local partner Dongfeng, following the Koleos and Kadjar. At the Chengdu show, Renault also debuted its 4th model produced with Dongfeng: the redesigned Kaptur. The compact crossover will arrive in China in the coming months. Renault needs new products to rescue its sales in China. In August, deliveries of Dongfeng-Renault plunged 64 % year on year to 1,050. Through August, the partnership’s sales nosedived 73 % to 11,311, according to Dongfeng. Dongfeng-Renault was established in 2013 in the central China city of Wuhan. To quickly expand its presence in China’s EV market, Renault formed a joint venture in the east China city of Nanchang in July with local automaker Jiangling Motors Group by acquiring a 50 % stake in Jiangling Motors’ EV subsidiary. The French automaker has not disclosed production plans for the new venture, which is its third vehicle production site in China. In 2017, Renault also set up a light commercial vehicle joint venture with Brilliance Jinbei Automobile in the northeast China city of Shenyang. Brilliance-Renault now assembles vans for Brilliance Jinbei’s Jinbei and Huasong brands. It is to start producing Renault-badged vehicles in 2020. +++

+++ Electric vehicle startup RIVIAN got a big boost from one of its investors when Amazon announced it was ordering 100,000 electric delivery vans. Before Rivian has even begun commercial production at its factory in Normal, Illinois, the Amazon order rocketed it to the forefront of electric vehicle makers. Amazon chief executive Jeff Bezos said that as part of the online retailer’s plan to be carbon neutral by 2040 it would order the electric vans from Rivian, with deliveries starting in 2021. The goal is to deploy all the vehicles by 2024. Rivian, a potential rival to Tesla, unveiled its electric R1T pickup and R1S SUV last November, but had piqued Amazon’s interest earlier. Bezos personally reached out to Rivian CEO R.J. Scaringe last summer to express interest in an investment, sources previously said. Michigan based Rivian, founded in 2009, has raised close to $1.9 billion from investors, including a $700 million February round led by Amazon. The deal solidifies Rivian’s place among EV builders, said Sam Fiorani, a vice president with Auto Forecast Solutions. “It helps boost the image of the brand”, he said. Rivian aspires to be the first to produce a mass market electric pickup. It intends to begin selling its R1T by the end of 2020, a target that has not changed with the Amazon deal in place, said Rivian spokeswoman Amy Mast said. Traditional U.S. automakers Ford, a Rivian investor, and General Motors, as well as Tesla, are pushing to develop their own electric pickups. The Amazon vans, under the exclusive deal, will be built at Rivian’s plant, a former Mitsubishi factory in Normal, Illinois, Mast said. The first vehicles will be delivered in 2021 and 10,000 should be on the road by late 2022, she said. The vehicles will be serviced by Rivian. Scaringe has described the Rivian vehicle’s platform as a skateboard that packages the drive units, battery pack, suspension system, brakes and cooling system all below wheel height to allow for more storage space and greater stability due to a lower center of gravity. Amazon is looking to speed packages to shoppers’ doorsteps regardless of spikes in consumer demand or shortages of delivery personnel. Last year, Mercedes-Benz said Amazon had become the biggest customer of its Sprinter vans, securing 20,000 vehicles for delivery contractors. Ford invested $500 million in Rivian in April with plans to use the Rivian EV platform to build a new vehicle in North America. Details of that vehicle were not disclosed. Ford is not involved in the Rivian deal, Mast said. Amazon’s reputation and the contract size would raise Rivian’s status with potential customers and investors. It also offers the advantage of not having to chase buyers or ship vehicles all over the country. +++

+++ SKODA expects annual sales of 15,000 units for the Superb plug-in hybrid. Key markets for the model will be Germany,the United Kingdom, Sweden and the Czech Republic. Skoda has just started production of the Superb plug-in variant at its factory in Kvasiny. The 15,000 figure represents 20 % of total Superb production, the head of assembly at Kvasiny, Jiri Pacak, said at the production launch of the car. The production start is a milestone as important to the company as its founding or its purchase by the Volkswagen Group, Marek Jancak, Skoda’s head of global production, told journalists at the event. Skoda is embarking on an ambitious program of electrification that will see it introduce 10 electrified vehicles by 2022, including the introduction this year of the electric version of the Citigo and the start of production next year of an cross-over based on the VW Group’s electric MEB platform. This car was previewed by the Vision IV concept shown earlier this year. The Superb plug-in uses a 1.4-liter turbocharged gasoline engine mated to an electric motor to give a combined power output of 218 hp. The 13 kWh battery is big enough to give a range of 55 km as measured on Europe’s WLTP cycle. The hybrid drivetrain reduces emissions to below 40 g/km, Skoda has said. The automaker has yet to release exact official figures. The battery pack is produced in Skoda’s Mlada Boleslav plant and is identical to the battery in the Volkswagen Passat plug-in hybrid. The Superb plug-in is available in liftback and combi derivatives. No euro price has been given yet, but Skoda says the price in Germany will average out at 41,000 euros. A 6-speed DSG automatic gearbox is standard, as is a year’s subscription to the Skoda Connect app, which allows remote heating and cooling of the car. Sales of 15,000 a year would have been enough to push the Superb plug-in to second place in the plug-in hybrid charts in Europe for 2018, behind the Mitsubishi Outlander PHEV, which came top with sales of 24,038, followed by the Volvo XC60 Twin Engine. Plug-in hybrid sales are likely to see a big increase as automakers push more electrified cars into the European market in a bid to avoid fines under the new EU system which mandates they must reduce average CO2 levels to below 95 g/km. Analyst firm LMC Automotive predicts plug-in hybrid sales will reach 590,000 in Europe in 2020, compared with 220,000 forecast this year and 157,000 in 2018. Skoda said it could increase production of the Superb plug-in to 25,000 a year by adding more stations in a plug-in finishing hall area of the assembly shop at Kvasiny. This is at the end of line building the regular Superb, the plug-in and the Kodiaq. This additional area that was built for the new model employs an extra 40 workers to complete assembly of some of the electric components, as well as adding coolant for the battery. Skoda currently has 3 stations in the new finishing hall handling 60 cars a day but could add another 2 stations if demand outstripped current capacity, boosting annual production to 25,000. +++

+++ Indian automaker TATA MOTORS will launch an electric vehicle (EV) early next year based on a new powertrain technology it has developed to grow its portfolio of clean energy cars, the company’s chief executive said. The government’s incentive scheme supporting electric transport and a recent cut in taxes on electric cars is making it more affordable to build EVs, Günter Butschek, CEO, Tata Motors, told reporters in Mumbai. “It is a completely different conversation on EVs now. It has changed. Because in the past, it was all about proving the case. Now, it gives an opportunity to make EVs mainstream”, said Butschek. India is encouraging automakers to build EVs in an effort to curb high pollution in several cities and also to bring down its fuel import bill. But it has faced some resistance from carmakers, which say there charging infrastructure needs to be set up first and that battery costs are too high to build affordable EVs for the Indian market. Tata Motors said EVs built using the new powertrain technology will have a range of 250 kilometers on a single charge and the company will offer a warranty of 8 years on the batteries. “We are working on multiple products to make electric vehicles mainstream”, said Butschek, adding the company would soon give details about the kind of vehicle it will launch. +++

+++ TESLA ’s Model 3 has earned the top safety rating from the Insurance Institute of Highway Safety (IIHS), becoming the first Tesla to do so. The IIHS has given the Model 3 its highest rating, top safety pick+. It said the Model 3 earned good ratings across the board for crashworthiness. The car’s structure held up well in the driver-side small overlap front test, IIHS said. Last month, Tesla said it was launching an insurance service designed to give drivers in California, its biggest market, lower rates because of safety features on its electric vehicles. Tesla chief executive officer Elon Musk has been one of the strongest proponents of the idea that car insurance rates should plummet as driver-assist and self-driving technology become standard. The company’s cars generally rank among the most expensive vehicles to insure due to their high repair costs for components and sensor equipment, according to safety researchers and insurance providers. +++

+++ VOLKSWAGEN and Porsche have to recall around 227,000 cars due to problems with airbags and seatbelt pre-tensioners. The Tiguan, Sharan and CC models built in 2015 as well as Porsche 911, Boxter, Cayman and Panamera models from 2015 and 2016. Germany’s KBA federal motor authority said the cars needed an update to the software of the airbag control units. Volkswagen said 227,000 cars were affected, citing possible problems with airbags in some of them and adding that new software needed to be installed. A spokesman for Porsche said around 23,500 Porsche models could be affected by airbags or seatbelt pre-tensioners triggering even if the vehicle was not involved in an accident. It said the models affected were built in 2015 and 2016 and added that of the vehicles affected, around 3,900 were in Germany. +++